HDFC Ltd Q1 profit declines to Rs 2,734 crore

The country’s largest mortgage player HDFC on Wednesday reported marginal decline in consolidated net profit at Rs 2,734 crore for the first quarter ended on June 30. Its consolidated net profit during the April-June quarter of previous fiscal stood at Rs 2,797 crore.

However, total consolidated income rose to Rs 14,463 crore for the quarter as compared to Rs 13,531 crore for the quarter ended June 30, 2016. On standalone basis, HDFC posted a net profit of Rs 1,556 crore for April-June against that of Rs 1,871 crore in the corresponding quarter of previous year.

The company in a statement said the standalone profit numbers for the first quarter are not comparable. “In the quarter ended June 30, 2016, it sold shares of HDFC ERGO General to ERGO International AG, a subsidiary of Munich Re for a consideration of Rs 922 crore and had also created a one-time special provision of Rs 275 crore as a charge to the statement of profit and loss,” it said.

The reported profit before tax for the quarter ended June 30, 2017 stood at Rs 2,359 crore compared to Rs 2,700 crore in the corresponding quarter of the previous year. The effective tax rate for the quarter ended June 30, 2017 was higher at 34 per cent compared to 30.7 per cent in the corresponding quarter of the previous year, it said.

“This was because the stake sale of unlisted shares of HDFC ERGO in the corresponding quarter of the previous year attracted long-term capital gains tax at a lower rate of 23.07 per cent compared to the marginal corporate tax rate. We expect the tax rate to significantly reduce in the subsequent quarters on account of dividend income and sale of investments,” it said.

As a result, it said, the reported profit after tax for the quarter ended June 30, stood at Rs 1,556 crore. Standalone income was at Rs 8,141.76 crore for the quarter ended June 30, 2017, while it was at Rs 8,393.33 crore for the quarter ended June 30, 2016, it added.

The statement further said individual loan disbursements grew by 21 per cent during the quarter. The average size of individual loans stood at Rs 26.3 lakh.

As at June 30, 2017, the loan book stood at Rs 3,12,978 crore as against Rs 2,65,731 crore in the previous year. On asset quality, gross non-performing loans at June 30, amounted to Rs 3,513 crore. This is equivalent to 1.12 per cent of the loan portfolio.

In June 2017, the Reserve Bank of India’s Internal Advisory Committee identified various accounts for reference under the Insolvency and Bankruptcy Code, 2016. The Corporation has an exposure of Rs 909 crore as at June 30, 2017 in one of these accounts, it said. “As at March 31, 2017, though the account was not a non-performing loan, as a prudent measure, the Corporation had made adequate provisioning against this exposure. Thus, no further provisioning was required on this exposure for the quarter ended June 30, 2017,” it said.